By James Simons-
The UK’s consumer markets watchdog and Treasury are set to begin two reviews into competition and price transparency in Britain’s £2bn funerals market
The Competition and Markets Authority announced on Friday plans to investigate the integrity of the funeral industry, following claims of a wide rip off at the expense of mourning customers. whether funeral directors give people sufficient information on prices and services to afford them the best options. It intends to assess how prices have changed over time, and why.
The Competitions Markets Authority and Chancellor Philip Hammond’s Treasury will now jointly address serious concerns over sky-high prices and a lack of transparency for customers
The Competitions Markets Authority and Chancellor Philip Hammond’s Treasury will now jointly address serious concerns over sky-high prices and a lack of transparency for customers
Shares in the UK’s largest listed funeral operator, Dignity, plunged 12% to 1066p amid fears a price crackdown could damage growth.
The clampdown signals the end of self-regulation of the funeral market, which authorities suggest has failed to protect vulnerable customers and needs tighter policing.
The CMA will look at the level of competition between funeral directors after evidence showed some charged three and a half times as much for a basic funeral than other providers.
The Treasury is also launching a call for evidence on regulation in the pre-paid funerals sector, to “stop grieving families from being ripped off.” Under new plans for tougher government regulation for the funeral sector, the Financial Conduct Authority will play a greater role in supervising operations, particularly costs. The price of cremations is also to be included in the review.
“Affordability and debt can therefore be a real concern to many people, with those on the lowest incomes potentially spending up to one-third of their annual income on a funeral,” said the CMA.
Plans for an investigation come after it was revealed that in 2017, the average cost of a funeral was nearly £3,800, with extras adding another £2,000 to the total bill, the CMA said. The price of cremations — which now account for around 75 per cent of all funerals — will also be considered in the review.
Currently, the bulk of the pre-paid sector is voluntarily regulated by the Funeral Planning Authority, which does not have the power to prevent pre-paid plan providers from trading in cases of malpractice.
“I’m appalled by the lengths that some dishonest salesmen have gone to in order to sell a funeral plan. It breaks my heart to think that our oldest and most vulnerable are being pressured into funeral plans that leaves their grieving families out of pocket,” said John Glen, economic secretary to the Treasury.
The Co-operative Group, which has a funerals division, has welcomed the reviews. A spokesperson said: “The Co-op has introduced new products and initiatives to the market to help tackle funeral affordability and we have also been calling for regulation of the funeral planning sector by the FCA,” said a spokesperson.
The CMA plans to publish its initial findings and recommendations in six months’ time, ahead of the final report to be published in a year’s time. Depending on what it digs up, the CMA could take further action, such as opening consumer or competition enforcement cases.
“As part of this study, we want to ensure that people can at least receive clear information on prices and the services making up a funeral, and that people get a fair deal on the cremation fees charged,” said Daniel Gordon, senior director of markets at the CMA.